Danny Meyer, CEO of the Union Square Hospitality Group, said tipping will be eliminated at New York's Gramercy Tavern, Union Square Café, The Modern, and the group's 10 other restaurants by the end of 2016.

Meyer, who also founded the Shake Shack burger chain, said that the average server tip — 21 percent — will be incorporated into new, higher pricing across the restaurants' menus, and ensure back-of-the-house staff are compensated more.

"By incorporating everything in the menu prices, and therefore having it be the restaurant's responsibility to pay everybody a fair wage, we think we have the opportunity to make a great place to work for everybody — not just servers, but also for our cooks," he told NPR.

"When you get your bill, it should look just about exactly as it would have if you had left your gratuity in the old days," he added.

Meyer explained that many cooks in the restaurant industry are oftentimes making more money outside of fine-dining, leaving the white tablecloth restaurants in a lurch.

"We've never faced a labor shortage the way we have right now," said Meyer. "The fast food industry is by law going to be raising its minimum wage to $15 an hour. So why would you tell your parents, 'Gee, please help me pay the bills for a culinary education so I can make less than in a white-tablecloth restaurant."

Additionally, Meyer said that many servers end up taking a pay cut when they are promoted to management positions.

"[A] waiters' income in a fine-dining restaurant has gone up well over 200 percent," while other workers have only seen their hourly wage rise by 25 percent over the same time period, he said.

The New York Times reported that Tom Colicchio, another famous restaurateur, compared the new pricing scheme to that of car-service company Uber. Because Uber includes service in its overall fee, he said that many people — especially young people — are likely primed for the change.

Danny Meyer, CEO of the Union Square Hospitality Group, said tipping will be eliminated at New York's Gramercy Tavern, Union Square Café, The Modern, and the group's 10 other restaurants by the end of 2016.